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Fonar Press Releases

For Immediate Release

The Inventor of MR Scanning™

An ISO 9001 Company

Contact: Daniel Culver

110 Marcus Drive

Director of Communications

Melville, NY 11747-4292

Web site: www.fonar.com

Phone: (631) 694-2929

Email: investor @ fonar. com

Fax: (631) 390-1709

FONAR Announces Fiscal 2015 3rd Quarter Earnings

  • Third Quarter Fiscal 2015 Diluted Net Income Per Common Share Available to Common Shareholders increased 19% to $0.31, versus Third Quarter Fiscal 2014
  • Third Quarter Fiscal 2015 Net Income increased 17% to $2.5 million verses Third Quarter Fiscal 2014
  • Third Quarter Fiscal 2015 Net Revenues increased 0.3% to $17.1 million versus Third Quarter Fiscal 2014

MELVILLE, NEW YORK, May 11, 2015 - FONAR Corporation (NASDAQ-FONR), The Inventor of MR Scanning™, reported its financial results for the period ended March 31, 2015. The Company’s two industry segments are: development, manufacturing and servicing of the UPRIGHT® Multi-Position™ MRI and management of Stand-Up® MRI (UPRIGHT® MRI) centers. The Company is known as the first Company to invent and manufacture an MRI (Magnetic Resonance) scanner. Leading the list of FONAR’s most recent patented inventions is its technology enabling UPRIGHT® full weight-bearing MRI imaging, in contrast to the conventional weightless recumbent MRI imaging. This enables, for the first time, full weight-bearing imaging of all the gravity sensitive regions of the human anatomy, e.g. the spine, brain, hip, knee, ankle, foot, shoulder and pelvis. The FONAR UPRIGHT® Multi-Position™ MRI scanner is the world’s only MRI scanner licensed under FONAR’s multiple UPRIGHT® MRI patents to scan all the patient’s body parts in their normal full weight-bearing UPRIGHT® position.

Statement of Operations Items

Revenues for the third fiscal quarter ended March 31, 2015 were $17.1 million as compared to $17.0 million for the corresponding quarter one year earlier. Revenues increased to $52.2 million for the nine month period ended March 31, 2015 from $51.5 million for the corresponding period one year earlier.

Net Income for the third fiscal quarter ended March 31, 2015 was $2.5 million as compared to $2.1 million for the corresponding quarter one year earlier, an increase of 17%. Net Income increased 5% to $9.2 million for the nine month period ended March 31, 2015 from $8.8 million for the corresponding period one year earlier.

Income from Operations increased 15% to $2.7 million for the third fiscal quarter ended March 31, 2015 as compared to $2.3 million for the corresponding quarter one year earlier. Income from Operations was $9.7 million for the nine month periods ended March 31, 2015 and March 31, 2014.

Diluted Net Income Per Common Share Available to Common Shareholders for the third fiscal quarter ended March 31, 2015 increased 19% to $0.31 as compared to $0.26 for the corresponding quarter one year earlier. Diluted Net Income Per Common Share Available to Common Shareholders for the nine month periods ended March 31, 2015 increased 14% to $1.09 from $0.96 for the corresponding period one year earlier.

Balance Sheet Items

Total Assets at the quarter ended March 31, 2015 were $74.5 million, as compared to $76.8 million at June 30, 2014.

Total Current Assets at the quarter ended March 31, 2015 were $43.1 million, as compared to $42.8 million at June 30, 2014.

Total Cash and Cash Equivalents March 31, 2015, were $7.8 million, as compared to $10.0 million at June 30, 2014. Five million cash was used by the Company to purchase 20% of the Class A Members ownership interest in Health Diagnostic Management on January 8, 2015.

Total Liabilities at the quarter ended March 31, 2015 were $27.5 million, as compared to $30.9 million at June 30, 2014.

Total Current Liabilities at the quarter ended March 31, 2015 were $20.3 million, as compared to $21.2 million at June 30, 2014.

Management Discussion

Raymond V. Damadian, president and chairman of Fonar Corporation, said, “The periodic cuts in MRI reimbursements brought about by the Affordable Care Act have subsided, at least for now. Because the Company has a winning strategy and strong management team we continue to make more and more profit and I am happy to report that our diluted net income per common share available to common stockholders has increased by 19% last quarter over the quarter that ended one year earlier (March 31, 2015 vs 2014). In addition, much of our success is due to the medical need met by our cutting edge UPRIGHT® full weight-loaded MRI scanner.”

By continuing to educate the medical community about the unique diagnostic advantages of UPRIGHT® Multi-Position™ full weight-loaded MRI, we expect increase scan volume at our existing imaging centers. We also expect growth to come through adding UPRIGHT® imaging centers that we manage,” said Dr. Damadian.

Dr. Damadian continued, “On January 8, 2015, the Company acquired 20% of the Class A members ownership interest in Health Diagnostic Management LLC for a cost of approximately $5.0 million, bringing it’s ownership interest in Health Diagnostic Management LLC to 60.4% from 50.5%. The corresponding impact for FONAR and thus to our shareholders is that this transaction adds to net income and to diluted net income per common share available to common stockholders.

Significant Events

The Company will hold its annual meeting on June 15, 2015. Dr. Damadian has issued his annual shareholder letter which can be seen on the Company’s Web site at www.fonar.com/shareholder_letter.htm.

Recently a medical monograph was published by S. Karger, AG based in Basel, Switzerland (see www.karger.com/Book/Home/261956). It is titled “The Craniocervical Syndrome and MRI,” and highlights the FONAR UPRIGHT® Multi-Position MRI. It also highlights the recently discovered syndrome that shows how neck injury can interfere with cerebrospinal fluid (CSF) flow in the brain, causing a variety of brain diseases. For more details and a press release visit www.fonar.com

About FONAR

FONAR (NASDAQ:FONR), Melville, NY, The Inventor of MR Scanning™, was incorporated in 1978, and is the first, oldest and most experienced MRI company in the industry. FONAR introduced the world’s first commercial MRI in 1980, and went public in 1981. FONAR’s stellar product is the UPRIGHT® MRI (also known as the Stand-Up® MRI), the only whole-body MRI that performs Position™ imaging (pMRI™) and scans patients in numerous weight-bearing positions, i.e. standing, sitting, in flexion and extension, as well as the conventional lie-down position. The FONAR UPRIGHT® MRI often sees the patient’s problem that other scanners cannot because they are lie-down and ”weightless” only scanners. The patient-friendly UPRIGHT® MRI has a near-zero claustrophobic rejection rate by patients. As a FONAR customer states, “If the patient is claustrophobic in this scanner, they’ll be claustrophobic in my parking lot.” Approximately 85% of patients are scanned sitting while they watch a 42” flat screen TV. FONAR is headquartered on Long Island, New York.

UPRIGHT® and STAND-UP® are registered trademarks and The Inventor of MR Scanning™, Full Range of Motion™, Multi-Position™, Upright Radiology™, The Proof is in the Picture™, True Flow™, pMRI™, Spondylography™, Dynamic™, Spondylometry™, CSP™, and Landscape™, are trademarks of FONAR Corporation.

This release may include forward-looking statements from the company that may or may not materialize. Additional information on factors that could potentially affect the company's financial results may be found in the company's filings with the Securities and Exchange Commission.

CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts and shares in thousands, except per share amounts)
(UNAUDITED)

ASSETS

 
March 31,
2015
June 30,
2014 *  
Current Assets:
   
Cash and cash equivalents      
$ 7,828
$ 9,952
Accounts receivable – net
4,071
4,450
Accounts receivable - related party
30
Medical receivable – net
9,037
8,808
Management and other fees receivable - net
14,618
11,970
Management and other fees receivable – related medical practices – net
3,669
3,427
Costs and estimated earnings in excess of billings on uncompleted contracts
681
760
Inventories
2,286
2,444
Prepaid expenses and other current assets
855
1,011
Total Current Assets

43,075

42,822

Deferred income tax asset
5,740
5,740
Property and equipment – net
13,454
15,030
Goodwill
1,767
1,767
Other intangible assets – net
9,653
10,509
Other Assets
853
922
Total Assets
$ 74,542
================
$ 76,790
================

 

CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts and shares in thousands, except per share amounts)
(UNAUDITED)

LIABILITIES AND STOCKHOLDERS' EQUITY

 
March 31,
2015
June 30,
2014 *
Current Liabilities:
   
Current portion of long-term debt and capital leases
$ 2,896
$ 2,891
Accounts payable
2,304
2,482
Other current liabilities
8,994
9,024
Unearned revenue on service contracts
4,232
4,731
Unearned revenue on service contracts – related party
28
Customer advances
1,668
1,927
Billings in excess of costs and estimated earnings on uncompleted contracts
142
142
Total Current Liabilities
20,264
21,197
 
   
Long-Term Liabilities:
   
Deferred income tax liability
584
584
Due to related medical practices
232
234
Long-term debt and capital leases, less current Portion
6,311
8,482
Other Liabilities
156
386
Total Long-Term Liabilities
7,283
9,686
Total Liabilities
27,547
30,883
STOCKHOLDERS' EQUITY:
   
Class A non-voting preferred stock $.0001 par value; 453 shares authorized at March 31, 2015 and June 30, 2014, 313 issued and outstanding at March 31, 2015 and June 30, 2014
Preferred stock $.001 par value; 567 shares authorized at March 31, 2015 and June 30, 2014, issued and outstanding – none
Common Stock $.0001 par value; 8,500 shares authorized at March 31, 2015 and June 30, 2014, 6,062 and 6,057 issued at March 31, 2015 and June 30, 2014, respectively; 6,051 and 6,046 outstanding at March 31, 2015 and June 30, 2014, respectively
1
1
Class B Common Stock (10 votes per share) $ .0001 par value; 227 shares authorized at March 31, 2015 and June 30, 2014, .146 issued and outstanding at March 31, 2015 and June 30, 2014
Class C Common Stock (25 votes per share) $.0001 par value; 567 shares authorized at March 31, 2015 and June 30, 2014, 383 issued and outstanding at March 31, 2015 and June 30, 2014
Paid-in capital in excess of par value
175,413
175,284
Accumulated deficit
(142,047)
(149,259)
Notes receivable from employee stockholders
(33)
(39)
Treasury stock, at cost - 12 shares of common stock at March 31, 2015 and June 30, 2014

(675)
(675)
Total Fonar Corporation Stockholder Equity
32,659
25,312
Noncontrolling interests
14,336
20,595
Total Stockholders' Equity
46,995
45,907

Total Liabilities and Stockholders' Equity

$ 74,542
================
$ 76,790
================

* Condensed from audited financial statements
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Amounts and shares in thousands, except per share amounts)
(UNAUDITED)
 
FOR THE THREE MONTHS ENDED MARCH 31,
REVENUES
2015
2014  
Product sales - net
$ 160
$ 478
Service and repair fees - net
2,299
2,518
Service and repair fees - related parties - net
27
27
Patient fee revenue, net of contractual allowances and discounts
7,284
6,090
Provision for bad debts for patient fee
(3,201)
(2,868)
Management and other fees - net
8,653
8,538
Management and other fees–related medical practices – net
1,874
2,257
Total Revenues - Net
17,096
17,040
COSTS AND EXPENSES
   
Costs related to product sales
352
223
Costs related to service and repair fees
630
623
Costs related to service and repair fees - related parties
7
7
Costs related to patient fee revenue
2,044
1,947
Costs related to management and other fees
5,285
5,327
Costs related to management and other fees - related medical practices
1,284
1,318
Research and development
360
360
Selling, general and administrative
3,706
3,935
Provision for bad debts
762
981
Total Costs and Expenses
14,430
14,721
Income From Operations
2,666
2,319
Interest expense
(169)
(203)
Investment income
52
57
Other Expense
39
Income Before Provision for Income Taxes and noncontrolling Interests
2,549
2,212
Provision for Income Taxes
30
65
Net Income
2,519
2,147
Net Income - Noncontrolling Interests
(500

(408)

Net Income - Controlling Interests

$ 2,019
================
$ 1,739
================
Net Income Available to Common Stockholders
$ 1,888
================
$ 1,625
================
Net Income Available to Class A Non-Voting Preferred Stockholders
$ 98
================
$ 82
================
Net Income Available to Class C Common Stockholders
$ 33
================
$ 29
================
Basic Net Income Per Common Share Available to Common Stockholders
$ 0.31
================
$ 0.27
================
Diluted Net Income Per Common Share Available to Common Stockholders
$ 0.31
================
$ 0.26
================
Basic and Diluted Income Per Share - Class C Common
$ 0.09
================
$ 0.08
================
Weighted Average Basic Shares Outstanding – Common Stockholders
6,050
================
6,022
================
Weighted Average Diluted Shares Outstanding - Common Stockholders
6,178
================
6,150
================
Weighted Average Basic Shares Outstanding – Class C Common
383
================
383
================
Weighted Average Diluted Shares Outstanding – Class C Common
383
================
383
================

CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Amounts and shares in thousands, except per share amounts)
(UNAUDITED)
 
FOR THE NINE MONTHS ENDED
MARCH 31,
REVENUES
2015  
2014    
Product sales - net
$ 1,806
$ 1,261
Service and repair fees - net
7,288
7,578
Service and repair fees - related parties - net
83
83
Patient fee revenue, net of contractual allowances and discounts
20,700
17,811
Provision for bad debts for patient fee
(9,244)
(7,130)
Management and other fees - net
26,004
24,955
Management and other fees–related medical practices – net
5,536
6,923
Total Revenues - Net
52,173
51,481
COSTS AND EXPENSES
   
Costs related to product sales
1,674
902
Costs related to service and repair fees
1,611
1,755
Costs related to service and repair fees - related parties
18
19
Costs related to patient fee revenue
5,845
5,823
Costs related to management and other fees
15,665
15,591
Costs related to management and other fees - related medical practices
3,893
3,808
Research and development
1,116
1,128
Selling, general and administrative
11,108
12,024
Provision for bad debts
1,540
763
Total Costs and Expenses
42,470
41,813
Income From Operations
9,703
9,668
Interest expense
(545)
(682)
Investment income
173
178
Other Expense
(2)
(113)
Income Before Provision for Income Taxes and noncontrolling Interests
9,329
9,051
  Provision for Income Taxes
99
235
Net Income
9,230
8,816
Net Income - Noncontrolling Interests
(2,018)

(2,497)

Net Income - Controlling Interests

$ 7,212
================
$ 6,319
================
Net Income Available to Common Stockholders
$ 6,743
================
$ 5,907
================
Net Income Available to Class A Non-Voting Preferred Stockholders
$ 350
================
$ 307
================
Net Income Available to Class C Common Stockholders
$ 119
================
$ 105
================
Basic Net Income Per Common Share Available to Common Stockholders
$ 1.11
================
$ 0.98
================
Diluted Net Income Per Common Share Available to Common Stockholders
$ 1.09
================
$ 0.96
================
Basic and Diluted Income Per Share - Class C Common
$ 0.31
================
$ 0.27
================
Weighted Average Basic Shares Outstanding – Common Stockholders
6,050
================
6,002
================
Weighted Average Diluted Shares Outstanding - Common Stockholders
6,178
================
6,130
================
Weighted Average Basic Shares Outstanding – Class C Common
383
================
383
================
Weighted Average Diluted Shares Outstanding – Class C Common
383
================
383
================

FONAR™ Corporation
110 Marcus Drive
Melville, N.Y. 11747
Tel. 631-694-2929
Fax. 631-390-9540
Email sales@FONAR.com
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